Shaun H. Crosner

Crosner was among a group of 12 lawyers who left Liner LLP two years ago with rainmaker Kirk A. Pasich to open a new insurance recovery firm. Now 36, The move was "a good opportunity for our group to become a leading boutique in the state," said Crosner who does both trial court and appellate litigation work.

For the owners of more than 300 California Pizza Hut franchises, he is seeking $5 million in coverage from their employment practices liability insurer for the defense of a series of lawsuits filed by their current and former employees alleging various violations of the California Labor Code. The violations include alleged failures to pay overtime wages, to reimburse necessary business expenses and to provide required meal and rest breaks.

The coverage dispute moved to an appellate panel after an Orange County trial judge sustained the underwriters' demurrer to the franchises' complaint. Crosner, in his opening brief to the 4th District Court of Appeal, argued that the allegations in the underlying lawsuit fall well within the policy's coverage grant.

"The trial court's contrary conclusion is belied by decades of California case law confirming the breadth of a liability insurer's duty to defend potentially covered claims," he wrote. Southern California Pizza Co. LLC v. Certain Underwriters at Lloyd's, London, G056243 (4th DCA, filed Aug. 31, 2018).

Crosner argued the case in July.

"I felt like they were with us," he said of the panel. The outcome will yield the appellate courts' first opinion regarding insurance coverage for claims alleging violations of the California Labor Code, he said.

"This is a significant case for employers," Crosner added. "We're very active in the area of employment wage and hour class actions in which the insurance industry has been denying coverage--even though a lot of the claims are covered. We are starting to challenge these denials, and we here at Pasich have probably litigated more of these claims than anyone else."

Crosner also does arbitration work. For client Asics America Corp., an athletic shoe and apparel manufacturer, he appeared before a JAMS arbitrator in March 2019 in a dispute with Mitsui Sumitomo Insurance USA Inc. The insurer denied coverage for high-stakes underlying litigation between Asics and one of its former retailers, on claims by the retailer that Asics lied to employees, telling them that the retailer would have to close its stores. Crosner argued that the allegations were sufficient to trigger the Mitsui policy's coverage for defamation and disparagement claims. The arbitrator agreed, holding that the insurer had a duty to defend the underlying lawsuit.

Asics America Corp. v. Mitsui Sumitomo Insurance USA Inc., Ref. No. 1220058746 (JAMS, filed March 2, 2018).

The underlying suit contained 14 causes of action. Most of them were uncovered, Crosner said, but "we asserted that two sentences in the complaint suggested a potential for coverage--which, we argued, was sufficient to trigger Mitsui's obligation to defend the entire lawsuit. We're proud of that win."

He continued: "Insurers usually have an exclusion clause that they try to extend too broadly. They overreach. There's a lot of money involved in these high-stakes, high-exposure cases, and these are common issues that employers face."

-- John Roemer